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By Dan LevineReuters • Monday August 11, 2014 1:23 AM

SAN FRANCISCO — Yelp Inc. and its executives are accused in a lawsuit of selling more than $81
million in stock while deceiving shareholders about the quality of consumer reviews on its
website.

The proposed class action, which was filed in U.S. District Court in San Francisco last week,
said Yelp’s share price had reached artificially inflated prices of over $98 this year because the
company had misrepresented its true condition.

“Reviews, including anonymous reviews, appearing on the company’s website were not all authentic
‘firsthand’ reviews,” the lawsuit said, “but instead included fraudulent reviews by reviewers who
did not have firsthand experience with the business.”

Yelp said in a statement that the allegations “are without merit” and said it “will vigorously
contest them.”

As media reports about problematic consumer reviews surfaced this year, Yelp stock sank to just
under $66 per share in April, the lawsuit said. Before the stock drop, CEO Jeremy Stoppelman sold
more than 132,000 shares for proceeds of more than $2.5 million, according to the lawsuit.

The company reported its first quarterly profit as a public company last week. Its shares closed
at $68 on Friday.

The lawsuit, in U.S. District Court, Northern District of California, is Joseph Curry,
individually and on behalf of all other similarly situated vs. Yelp Inc. et al.